Analysis: The Cost-Cutting Starts to Bite

At the end of last season, Eddie Jordan and Craig Pollock appeared side by side at a news conference in Japan.

It was barely a month on from September 11, the world was in shock and storm clouds were gathering on the economic horizon. What did it mean for Formula One?, the Jordan and British American Racing (BAR) bosses were asked.

The answers, in the light of recent events, were prescient.

"I think every team really needs to reflect on what's happened because it is going to affect the whole of Formula One. I think it's going to be harder and harder to fill up the sponsorship books," said Pollock at Suzuka.

Jordan, whose team had pulled off a coup earlier in the season by securing a long-term deal for the same Honda engines used by BAR, agreed.

"It would be preposterous for us in this sport to think we are immune," he said. "The world is in recession and we are not recession-proof and unless we make and cut our cloth to suit what is required, we will pay the penalties.

"One of the things that I remember...was in the early '90s when I came to this sport there were 18 teams and in '93 or '94 there were nine or 10. I think there is immense responsibility on teams like McLaren, Williams and Ferrari to guide us through this time because the people who will suffer least will be them."

Job Losses

Last Tuesday, Jordan announced they were making 15 percent of their staff redundant - some 40 jobs, including some senior and long-serving figures, to cut costs. BAR did the same in March, also cutting its staff by 15 percent but bringing in some new people following the ousting of Pollock in December and his replacement by David Richards.

At the same time, there are persistent whispers suggesting that Honda - neither of whose teams have scored a point yet this year - may decide to concentrate on BAR from the end of 2003.

In January, the Prost team went to the wall and many people in Formula One fear they will not be the last casualties. Minardi and Arrows already operate on shoestring budgets compared to some of their rivals.

The smaller entrepreneurial teams are struggling, sponsorship is falling off while their manufacturer-owned rivals spend more and more on testing and development.

Jordan, a born entrepreneur and survivor who has come a long way since he sold carpet off-cuts and time-expired smoked salmon in a Dublin market, is both worried and passionate about the need for change.

"People say Prost was not typical, claiming it was Alain Prost's fault rather than part of the bigger picture," he said this week in Autosport magazine. "It will happen to someone else, and still people will not take notice...well I am sorry. We have to take notice of it now.

"We have to look to make sure the show is absolutely the best, make it better if possible and try to minimise costs, or F1 as we have known it for 50 years will disappear."

Close Escapes

The Irishman, who launched his team from a lock-up garage at Silverstone without a sponsor or drivers and before a handful of sceptical journalists in 1990, knows how tough Formula One can be.

He has had close escapes, notably in 1991 when Michael Schumacher's debut drive for the team brought in some vital cash from Mercedes at a time when Belgian bailiffs had impounded the cars. He is determined to remain a survivor, fighting against the odds and sometimes winning.

"Jordan has always been at its best when lean and efficient," said Jordan this week. "Once you sense complacency creeping in, or costs becoming exorbitant, a prudent business needs to take action."